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The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Tesla, Inc. (TSLA), Bank of America Corporation (BAC), and Alibaba Group Holding Limited (BABA), as well as two micro-cap stocks Seneca Foods Corporation (SENEA) and Nathan's Famous, Inc. (NATH). The Zacks microcap research is unique as our research content on these small and under-the-radar companies is the only research of its type in the country.

These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

Tesla shares have outperformed the Zacks Automotive - Domestic industry over the past year (+73.4% vs. +47.8%), likely reflecting the expectation that the worst of the company's competitive challenges that had been weighing on its margins was behind it. The company’s annual deliveries contracted for the first time ever in 2024, but its long-term growth story remains intact driven by its thriving Energy Generation & Storage segment, expansive Supercharger network and AI advancements.

Energy deployments doubled in 2024 and the upward trajectory is set to continue, thanks to the strong reception of its Megapack and Powerwall products. Progress in the autonomous vehicle domain, including plans to launch robotaxi services in 2025, position the company well for sustained growth.

Despite potential rebate cuts under a Trump presidency, Tesla is well-positioned to thrive without subsidies, thanks to its cost efficiency and unmatched scale. Tesla’s robust balance sheet, with a high liquidity buffer, supports continued innovation and expansion. As such, we are bullish on the stock.

Shares of Bank of America have modestly lagged peer JPMorgan's performance over the past year (+37% vs. +43.4%), but have handily outperformed the S&P 500 index over the same time period (+37% vs. +23%). The stock's strong recent momentum reflects optimism about the operating environment characterized by an easing Fed and expectations of pro-growth and less stringent regulatory policies from the Trump administration. Many in the market expect this performance to get a boost from this week's Q4 earnings release (the company reports Q4 results the morning of Thursday, January 16th). 

The Zacks analyst projects non-interest income to rise 9.7% in 2024 and only 1.8% in 2025. Due to continued investments in the franchise, costs will remain high. We expect total non-interest expenses to rise 1.2% in 2024. While high funding costs are still a concern, the company’s net interest income (NII) will be positively impacted by rate cuts. We project NII to witness a CAGR of 3.3% by 2026.

The company plans to open financial centers in new and existing markets and improve digital capabilities. These will support the top line. We project total revenues to grow 3.1% in 2024.

Alibaba shares have gained +7.8% over the past year against the Zacks Internet - Commerce industry’s gain of +37.8%, with uncertainty about China's economic outlook weighing on the stock. The company is benefiting from strong momentum across its international commerce retail business. Solid combined order growth in AIDC’s retail businesses and strength in AliExpress’ Choice are contributing well.

Growing international commerce wholesale business, thanks to strength in cross-border-related value-added services, is a tailwind. Expanding China's wholesale commerce business remains a major positive. Robust local consumer services and Cainiao logistics services are further driving top-line growth.

Strength in Lazada, AliExpress and Trendyol is expected to continue benefiting Alibaba’s international business. However, rising expenses related to new initiatives are a concern. Macroeconomic uncertainties and unfavorable foreign exchange fluctuations remain risks.

Shares of Seneca Foods have outperformed the Zacks Food - Miscellaneous industry over the past year (+22.0% vs. -10.2%). This microcap company with market capitalization of $491.59 million demonstrates strong sales momentum with 3.4% growth in net sales for the first six months of fiscal 2025, driven by a 9.9% increase in case volumes (excluding co-pack).

Strategic inventory reductions and improved cash flow highlight financial discipline, while its diversified product mix, including brands like Libby’s and Green Giant, supports market leadership in packaged fruits and vegetables.

Despite these strengths, rising costs from weather impacts, higher LIFO charges, and a 46.3% decline in net earnings in second-quarter fiscal 2025 present significant profitability risks. For the first six months of fiscal 2025, gross margins fell to 11.7%. Increased interest expenses, competitive pressures, raw material volatility and customer concentration further underscore challenges in sustaining growth.

Nathan's Famous shares have outperformed the Zacks Retail - Restaurants industry over the past year (+6.1% vs. +5.9%). This microcap company with market capitalization of $313.66 million has shown consistent growth, with second-quarter fiscal 2025 revenues up 6.1% year over year to $41.1 million and net income up 5.6% to $6 million.

The Branded Product Program grew 4.5% in the first half of fiscal 2025, driven by higher hot dog sales and pricing, while licensing royalties rose 12.1% in the first half of fiscal 2025, with Smithfield Foods contributing $20.6 million. Despite expanding its franchise network by 21 locations and the iconic brand and international footprint supporting long-term growth, challenges include declining franchise fees, high debt levels and cost pressures from rising beef prices and labor inflation.

Heavy reliance on Smithfield and variability in company-owned location performance underscore risks. Competitive pressures and regulatory uncertainties could further impact margins and growth.

Other noteworthy reports we are featuring today include NextEra Energy, Inc. (NEE), ConocoPhillips (COP), and Southern Copper Corporation (SCCO).

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